California Budget One Vote Short of Ending Impasse
California's Senate halted a middle- of-the-night vote on a $40 billion package of tax increases, spending cuts and borrowing aimed at a closing a record deficit, after the plan fell one vote short needed for passage, dpa reported.
Senate Democrats used a procedural motion to suspend balloting while Republican Governor Arnold Schwarzenegger and Senate leaders worked behind closed doors to secure an additional Republican approval. Lawmakers adjourned shortly after 10 a.m. Sacramento time after meeting through the night. They were to reconvene in the early afternoon.
"It's counter-intuitive to think that you can solve this budget problem in this economy with tax increases," said Senator Dave Cox, a Sacramento-area Republican who Democrats had counted on to vote for the package. Democrats control both legislative chambers.
The legislative package includes plans to raise the state sales-tax rate to 8.25 percent from 7.25 percent; boost vehicle license fees to 1.15 percent from 0.65 percent of the value of an automobile; add 12 cents to the per-gallon gasoline tax; reduce the dependant-care tax credit to $100 from $300 and impose a surcharge on income taxes of up to 5 percent.
Failure of the package would prolong a four-month stalemate over how to cover a record $42 billion deficit that drained California of cash, left it with the lowest credit rating among U.S. states, forced officials to delay paying bills totaling $3.7 billion and halted $3.8 billion of bond-financed construction on schools, roads and other public works.